Blue Dogs Delay, Water Down House Health Care Bill

Conservative Blue Dog Democrats on the House Energy and Commerce Committee are celebrating their success in delaying a full floor vote on health care legislation past the August recess and in slightly weakening two key provisions during their negotiations with committee Chairman Henry Waxman.

"We have successfully pushed a floor vote to September," Mike Ross (D-Ark.) told reporters Wednesday afternoon. "The American people want us to slow down, and that's what we're doing here."

The Blue Dogs wrestled some concessions out of Waxman (D-Calif.), particularly related to a public health care option and employer mandates. The committee's current version of the public option now more closely resembles that of the health committee in the Senate.

For instance, rather than linking the public option to the rates enjoyed by Medicare, the new language would require a separate agreement without Medicare's bargaining power, Rep. Jerrold Nadler (D-N.Y.) said. Secretary of Health and Human Services Kathleen Sebelius would be responsible for negotiating deals with service providers from day one of the public plan's existence, rather than year three. States can also set up co-op insurance plans in addition to the public option, but not in its stead.

"The public option must go out and negotiate with providers, just like private health insurance companies do," Ross said. "It's strictly optional. It won't be mandated on anyone. It will not be based on Medicare rates."

Under the terms of the compromise, close to 86 percent of small businesses -- those with an annual payroll of $500,000 or less -- will be exempt from the mandate to provide employees with health insurance, Ross said, although the Blue Dogs weren't alone in pushing for that change. Those with an annual payroll between $500,000 and $750,000 must provide graduated partial assistance.

"That's as close as you can get to totally removing the mandate without removing it," Ross said. "Quite frankly, once you get up to three-quarter million a year in annual payroll, as a former small business owner myself, most of them are already providing health insurance, and if they're not, they should."

Under the original draft legislation, Ross said, barely one-fifth the number of businesses would have been exempted.

Provisions preventing discrimination against people with preexisting conditions remain in the bill, as does a ban on rescission, the notorious insurance-company practice of voiding contracts under some pretext when a customer becomes too costly.

The Blue Dog negotiators -- Ross, Bart Gordon (D-Tenn.), Baron Hill (D-Ind.) and Zack Space (D-Ohio) -- account for a majority of the seven swing Blue Dogs on the Energy and Commerce Committee, and their approval marks a big step toward passing the bill out of committee and onto the floor, where it will be reconciled with the two other health reform bills from the Ways and Means and Education and Labor committees.

Ross said he and the other committee Blue Dogs are determined to keep the cost of the final bill under $1 trillion over 10 years. He stumbled a bit, however, on the question of how many Americans he expects a weaker bill to cover.

"As many as when we went into these -- our objective has always been to make health insurance affordable for as many people as we can in this country," he said, but estimated another 10 steps between the current bill and the one that will reach President Obama's desk. "There's going to be a lot of changes between now and then."

Ross also credited representatives from the Obama administration -- including Chief of Staff Rahm Emanuel and Office of Health Reform head Nancy Ann DeParle -- with smoothing over negotiations with Waxman. For its part, the White House Press Office responded with a chipper statement released under Obama's name:

I want to thank the members of both the Senate and House of Representatives for continuing their work on health reform to provide more stability and security for Americans who have insurance, and quality, affordable coverage for those who don't. I'm especially grateful that so many members, including some Blue Dogs on the Energy and Commerce Committee, are working so hard to find common ground. Those efforts are extraordinarily constructive in strengthening this legislation and bringing down its cost.

House leadership likewise praised the committee Blue Dogs. "I think the way they've structured it is a good compromise," Rep. Chris Van Hollen (D-Md.) said. The offices of Speaker Nancy Pelosi (D-Calif.) and Majority Leader Steny Hoyer (D-Md.) released a laudatory statement not far from Obama's:

We are pleased with the full participation of all our Members, who have reviewed the legislation and proposed significant changes. At this time, we want to particularly recognize the valued leadership of the Blue Dog Coalition to lower costs, to make the legislation work better for their constituents, and to assist small businesses. These are goals shared by all Members of the Caucus. At the request of the Blue Dog Coalition, in order to allow more time to carefully review the additional proposed legislative language, we will bring the bill to the House floor in September.

Meanwhile, some rank-and-file House Democrats have been grumbling that the conservative Blue Dogs are driving the debate. Rep. Louise Slaughter (D-N.Y.) said several members of the Energy and Commerce Committee complained during floor votes Wednesday afternoon that they hadn't been kept apprised of the changes to the bill before Waxman and the Blue Dogs reached an agreement.

The 83-member Congressional Progressive Caucus, to which Waxman belongs, has reacted with particular horror to the Blue Dog changes to the public option. Though there are not enough progressives on the Energy and Commerce Committee to overpower the Blue Dogs -- only five, aside from Waxman -- caucus co-chair Lynn Woolsey (D-Calif.) circulated a petition Wednesday afternoon to collect signatures in protest of the deal.

[UPDATE: Just before it began, Waxman scratched Wednesday night's committee markup of the bill in order to address concerns from progressives, he told reporters. Slated to resume the review process Thursday morning, Waxman still hopes to pass the bill out of committee by the end of the week.]

Still, progressive Democrats said they were optimistic that when it comes time to reconcile the three committee bills, the final product will be significantly more to their liking than the Energy and Commerce version. "At this point, I just want to make certain we have a public option and it's good and strong," Slaughter said.

And with that in mind, Democrats are now casting the bill's delay over August recess as a chance for necessary further negotiation and review.

"A lot of people view this as the end ... the conversations are ongoing," Rep. Rosa DeLauro (D-Conn.) said. "Is there a Senate bill? You tell me. No? I rest my case. We've got a ways to go."